The world has seen an explosion of data collection.
We are becoming ‘datafied’; our locations, behaviours, interests, patterns and interactions. In the past, data was very expensive to collect, usually via surveys or a census, but today the ability to do so easily and at reduced cost makes it meaningful and helps unlock new opportunities.
First, there is a fundamental shift of mindset.
We have moved from a world of causality to an exploration of correlations. For example, Walmart uses data to forecast buying trends. By monitoring the weather and assessing the seasons, they cross-reference what the biggest sellers are during these periods.
When there was a storm coming, Walmart knew that flashlights sold well and anticipated that with increased stock. But by putting together their big data they also discovered a surprise – an increase in the sale of Pop Tarts. Causality is, "when it’s stormy, people buy flashlights". But a correlation of data is, "they also buy these sweet snacks".
To truly unlock the power of data, you need to fight against human territoriality and break data silos within corporations.
To explore correlations you need to bring together as many data sources as you can: customer, prospect, web, behavioural, transactional, marketing, third-party and so on. These are typically owned by specific business units and people tend to be obsessively possessive, struck by the ‘Gollum syndrome’. You can almost hear them whispering, “My customers, my contacts... my precious”.
Importantly, though brand communicators must maintain their professional intuition, they can also now test their assumptions or get recommendations.
Barack Obama’s team have been highly acclaimed for their fundraising activities and one method of doing so was to send emails to potential benefactors. The team decided to test different subject lines in these emails. One read, ‘Please support me for America,’ others read similarly. But, big data also enabled their computer to generate and test some additional suggestions. The Obama team discovered that the most successful subject line was the randomly generated, ‘Hey!’.
It made sense; it was personal, arresting, intriguing. Your instinct as a brand communicator would have been not to use that for a presidential candidate, but the data they were able to collect on the responses was undeniably positive. In the same way, The Economist tests creatives and subscription page design to optimise the conversion on an on-going basis.
From brand to browsing
There is a lot of justified hype surrounding the value of big data. We know that it’s a strategic asset, and fast becoming part of a company’s valuation. There used to be a phrase: ‘brand matters’. If you looked at the value of a company on the world stock market, around 40 per cent of its worth was apportioned to brand. I discovered that, in 2014, 45 per cent of Coca Cola was valued by brand. But, here’s an interesting thing: Google’s brand value was 28 per cent, Apple and Amazon came in at 16 per cent and Facebook, just six per cent. Do we think any of these companies – or GAFA as the acronym goes – have a brand problem? Absolutely not. Do they have a problem with market valuation? Maybe.
"To explore correlations you need to bring together as many data sources as you can"
But the power of these companies is in their ability to monitor, collect and make sense of data on a large scale. We no longer ask, either, we simply monitor. Permission is usually buried in 20 pages of terms and conditions. It should not be about one-click broad permission, but about clear and fair usage, which in itself is not easy to define. Ideally, consumers must also be able to manage their preferences at any time, but ultimately the amount and linking of consumer data is appealing for brand communicators.
People are equipped with more digital devices and spending more time being connected. Any time you spend browsing is an opportunity for GAFA to collect data. That means everything from your gender, religion and interests to your mobile phone number and location. With Facebook, a concert promoter can identify from your page that you have a trip to New York coming up and might be wise to note that you might be in the market for a show at Madison Square Garden.
Brand communicators are also directly leveraging social customer relationship management (CRM) data. Brands can use social login to append the customer profile data to their own CRM databases. That can be used to better understand the core attributes of specific product customers. Some publishers can even use it to enhance the socio-demo targeting capabilities that they offer to their advertisers.
Age, gender, job, industry and so on have always been valuable data to the advertising market. As a currency, data is now traded on a market-place via data exchange platforms like Bluekai or Exelate. Data supply is made up of search, geolocalisation, social, contextual, panel and offline data information. Cookies, devices, e-mail and browser IDs are swapped, matched, synched, fingerprinted... in this case, we talk not of data but data profiles because what’s being sold are people. There is no need for personally identifiable information, or PII, just attributes. As a matter of fact, brand communicators don’t want to target John Doe, they want to target people that are in the market for their product or services.
Your digital passport is your Facebook, LinkedIn, Twitter or Google login. If you don’t want to fill in a form, you can easily register using them. Beyond the convenience, it can also provide you with a personalised experience. Yes, companies like GAFA have data in their DNA.
Access and expertise
What is the opportunity for a company like The Economist?
There is an advert in France, which I think is brilliant, and the slogan reads, ‘Who is better than Renault to take care of your Renault?’ Well, since 1843 The Economist has been building products that appeal to opinion leaders, decision makers and progressive thinkers. So who better than The Economist to help marketers understand, reach and engage with the progressives?
Data and technological capabilities are giving us the expertise and the tools do so.
In-house, we use data to understand how our customers engage with our products so we can improve those products and improve the customer experience. Owned marketing channels do the same to improve the customer journey and our paid media does this to improve cost per acquisition. We also monitor our earned media; how our content is posted, shared and promoted.
Product, audience, customer, consumer and campaign insights as well as targeting and personalisation capabilities are leveraged by us to be better marketers but also to provide our advertising partners with better marketing solutions.
Yes, data is a strategic asset, but more importantly it contributes directly to our business model. It brings value to our bottom line. It helps us grow our advertising revenue, promote our brand, reduce our acquisition cost and retain our customers. It can also be leveraged to identify new business and revenue streams and product opportunities.
Where to start?
With big data you have to think big but start small. Ideally, a publisher would begin the journey with data capabilities that earn direct associated revenue: in other words, advertising.
The picture can look full of doom and gloom for legacy publishers and particularly for newspapers. In fact, media consumption is becoming increasingly fragmented, with people spending more time on video, social and mobile.
With the dominance of GAFA, and at a time when any individual can become a publisher, print publications have a very small and fading digital advertising market share. With the rise of programmatic and real-time bidding, the advertising industry is turning into an automated and data-driven market place. CPMs [the advertising cost per thousand views – Ed.] are going down due to the explosion of supply and concerns regarding viewability and non-human traffic, and brands themselves want to become publishers. Data can help publishers turn these trends into opportunities.
"Your digital passport is your Facebook, LinkedIn, Twitter or Google login"
A data management platform capability lets publishers sell media, combined with data, in a programmatic environment and also target and monetise their audience beyond their own platforms. They can leverage their first party data about their audiences as well as tap into third party data from the data marketplace. With the ability to re-target on social media, video and mobile marketplaces, publishers with valuable audiences can aim for bigger advertising budgets. They can also produce and promote content for brands, as well as measuring a campaign’s effective reach and engagement.
All these capabilities can also be leveraged for customer acquisition and The Economist was recently awarded with a bronze Lion in Cannes Lions for Best Use of Data.
The aim of this campaign was to expose our content to new prospects, to win their attention, change their perception of our brand and turn them into readers and subscribers. As they were progressive thinkers we based our creative strategy on the assumption that “there is nothing more provocative that the truth.”
To identify our prospects we first looked at our core audience. Data helped us map their interests (free-trade economics, liberal causes, career advancement, politics, a world beyond their own, technology and doing good) and identify their profile attributes. We then targeted ‘lookalikes’ in relevant context with relevant creatives. For example, a prospect keen on liberal causes and technology, when reading an article about the NSA on another newspaper website, would be shown the following creative: “This ad knows who you are. How do you feel? a) special b) spooked”.
After clicking, the prospect was directed to a specific landing page with an article from The Economist on internet privacy and data tracking. The prospect could then decide to register for more or buy a subscription.
Beyond identifying prospects and personalising creatives, we also use data to optimise the conversion funnel. We were able to understand what attributes and creatives linked to a higher conversion. For those who did not subscribe, we built pools of ‘hot prospects’ that we could retarget with special offers.
For this campaign we had to bring together campaign analytics, web analytics and customer relationship management data as well as our Bluekai data management platform. We also had to bring together our agency and internal circulation and data teams.
When it comes to big data, connectivity is paramount. Some departments have engagement data, some revenue... the key is to cross-reference this information to assist the marketer and not replace them. There is a natural tension between the marketer and the data analysis, but data is not an ultimate truth, it just provides the route for a journey.
The biggest challenge for most companies regarding data is actually internal but there are steps for making life easier. Have a champion for data at corporate level, and get support from the management board. Next, create a taskforce with stakeholders from circulation, advertising, UX, brand, legal and IT. Cut the project into smaller deliverables, don’t try and build everything yourself and earn some quick wins with associated revenue.
The future of data
If you’ve seen the Spielberg film Minority Report you will understand what I mean by predictive data. In this dystopian story, based on a book by Philip K.Dick, three psychics called ‘precogs’ can predict whether an individual will commit a criminal offence. The theme is free will versus determinism.
Although Minority Report is a work of fiction, what if data could be used to predict a purchase or behaviour? What if it could predict how much you would be willing to pay for a product? It may well lead to a pricing inequality where a company suspects, from data, that you would be willing to pay a premium for something but knows another may not. I don’t want to pay higher car insurance than someone who regularly drives badly, so what if there was a sensor in my car to record my good driving and set the price accordingly? What if a sensor in my fridge shows that I make healthy eating choices? My private health insurance would surely be lower.
Ray Kurzwei, a US computer scientist, futurist and inventor, predicts that, by 2020 personal computers will have an intelligence equivalent to a human brain; by 2030, nanotechnologies will be flourishing, production of goods will be decreasing and 3D printers will be used in hospital to print organs; and by 2045, our planet will turn into one single giant computer.
Artificial Intelligence is the future and that future is a shocking one. Will robots become customers and will we become robots? What will be the fun in brand communications and will be we even need it? Big data is so much more than the chance to engage and retain new business, but you’ll still have to call your mum on her birthday.